The basic of stock market and a guide to the beginners to know more about the Indian stock market

Let me keep it very simple and clear so that you can understand the basic of the stock market easily and effectively

“Stock market” is nothing but a market where stock is being available for sell and purchase and technically we call this place as stock market. But prior to this we need to understand what a stock is and the stock market as well.

What is stock and the stock market:

When a company is being formed, it required some capital and people offer money in the process of building of the company. As people offer money, in the return the company provides the sponsor the fractional ownership in the company.

The fractional ownership is called as the stock or the share of the company.

According to your sponsored fiancé you will get the respective stock in the company. Yes, the stock is often called as equity and finance security by some persons as well.

Now coming to stock market, it is the palace where the stock is being traded and this place is called as stock market. Though there will be no direct and physical selling of stock, only selling and trading will take place electronically.

In order to be a part of the stock selling or trading ,the first and the foremost condition is that the person should have a demat account.

When it comes to the stock market, in India there exists some 16 to 18 stock market. But the BSE and the NSE leads the way and majority in fact most of the stock in Indian market are traded.

A briefing for BSE and NSE:

As you are pretty aware that a significant number if firms are registered with the BSE and NSE, hence majority of the stack are traded with the BSE and the NSE.

Amongst the two stock market the BSE is the premier and a record number of 4700 numbers of firms have been registered with the BSE. Whereas the NSE has only some 500 registered firms for the trading of stocks.

The BSE was the first stock exchange in the country which was incepted in the year 1875, on the other hand the NSE was on 1992.

Benchmark of stock market of index of stock market:

Now you might have got some basic information about the stock market. But certainly one question must be striking to your mind that on what basis the stock is being traded on the market and what will be the index to trade in the stock exchange.

Lets make it clear, the index for BSE is SENSEX whereas the index for the NSE is NIFTY.

Based on the value of the SENSEX the trading activities carried out on the BSE and similarly the NIFTY plays the same role for the NSE.

Both the index i.e NIFTY and the SENSEX is being calculated by taking the average value of some reputed and well established stock in the market.

Based on the value of the index the market activities carried out and to be specific the index are the indicators of the market.

If the value of the index goes down, it indicates that the market is going down and similarly the value of the index will escalate if the market is performing well.

Who is the regulator of the market:

Simple a stock market can’t smoothly function without any supervisory and regulatory body. Hence in order to streamlined and smooth trading in the stock market the concept of a regulator was visualized.

And the since then the SEBI was laid down in the year 1992 by the Govt of India who will look after the regulator and supervisory function of the stock market.

Time to time the SEBI is laying down rules for the stock market and also it impose penalty to those who disobey or does not follow the rules laid down by the market regulatory authorities.

Theses are the fundamentals about the Indian stock market, which every one must aware of.

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